Loftis claims vindication after investigation dropped

State Treasurer Curtis Loftis said Friday he has been cleared of any wrongdoing after the state Attorney General’s Office found no evidence of a “pay-to-play” scheme in the agency which handles the state’s pension funds.

State Treasurer Curtis Loftis (File)

“Based upon a review of the report by SLED and its attachments, this Office has concluded that there was no activity which warrants action by this Office,” John McIntosh, the chief deputy attorney general, wrote in a letter to State Law Enforcement Division chief Mark Keel.

The investigation into the six-member South Carolina Retirement System Investment Commission began late last year after Loftis recommended two investment groups that were later represented by a Charleston political consultant who had been acting as an unpaid advisor for him.

The Commission had asked the Attorney General’s Office to look into the matter after an unnamed pension consultant in New York said that advisor Mallory Factor had approached the consultant. According to the consultant, the New York firm was promised it would be considered for a state contract to manage part of the fund if it paid Factor a fee to represent them.

Loftis claimed the investigation was a witch hunt by others on the commission against him. He questioned the timing of reports that detailed the investigation in February. Those reports came as the state Senate was considering a proposal to remove Loftis from the commission. That proposal eventually failed 34-10.

“In a $25 billion fund, there are lots of questions always being taken on,” Loftis told South Carolina Radio Network, “This was a question that was simply administrative review. But politics got involved.”

Specifically, Loftis accused the commission’s vice-chairman Reynolds Williams of “shopping the story” to reporters at the time.

However, Williams strongly denied the claim when reached Friday. “That is ludicrous. I categorically deny it and it’s typical of a politician trying to score political points off other people,” he said, “I never once called any reporter anytime, anywhere, about it.”

Williams said the commission–including Loftis– had voted unanimously to forward the investigation to the Attorney General’s Office. “I never encouraged anybody to investigate it, other than by casting my vote.”

“I think he (Loftis) just has a paranoid delusion about it, frankly.”

Loftis said the pension consultant who had questioned Factor’s involvement was a longtime friend of the commission’s former CIO Bob Borden. Loftis had publicly criticized Borden’s large salary and under-the-table dealings last year. Borden eventually resigned to work in the private sector in December.

Friday’s actions were the latest chapter in what has been a very public feud between Loftis and Williams. The vice-chairman had previously called for the Treasurer’s position to be removed from the commission, saying the other members are required to have an extensive financial background, while the Treasurer does not. Williams instead wants a sixth member to be appointed by the Treasurer’s Office.

SCRSIC Chairman Allen Gillespie said the agency had no comment Friday.

Loftis said he will continue his fight to make the fund’s dealings more public. “Big battles are always bloody and I know every time I fight one of them I’m going to leave a few pounds of my carcass on the Statehouse steps.”